Vol. 6 Num. 1 - GCG: Revista de Globalización, Competitividad y ...

Zhu Hongbo3.3. Third, better prices for South American exports125When the financial crisis deepened, the prices of energy, materials, and agricultural producedecreased sharply. South America, which exported most of them, met great challenge. In1929, the economic depression that derived from the US caused a sharp decrease in prices,and a big shrinking of the export market for most Latin American countries. Most of themsank into economic depression and political chaos. Would history repeat itself?Fortunately, this second financial crisis was controllable and manageable, and most countriesrecovered quickly, including China. When the Chinese economy got better, more goodswere imported, such as iron ore, oil, soybeans, and copper. The natural resource price increasedat the same time, and South American countries that exported such goods benefiteda lot from both the higher prices and increased imports to China. Since the 21 st centurybegan, South American economies grew more quickly than before, partly due to this priceincrease of natural resources, which was mainly driven by Chinese needs 21 .Argentina exported most of soybeans to China, Brazil exported iron ore, Venezuela exportedoil, and Chile exported copper. The prices of these good all increased very quickly from theirlow points during the financial crisis. For example, the price of copper decreased sharplyfrom about $4 per pound to about $2 per pound during the crisis. At the end of 2009, theprice had rebounded to about $3 per pound. Most of the outcome of Chilean foreign tradewas from copper exports, and about 20% of those copper exports in 2008 went to China 22 .In terms of the increased rate of volume and price for Chinese imports, the price rate wasfar higher than volume rate, especially for mine resources and energy, which were the mainexports of South America to China. For example, the import of copper and iron ore increasedonly about 8% in volume, but their prices increased by 93.1% and 48.1%, respectively, fromJanuary to May in 2010.CommodityTable 2: Volume and Price of Chinese import from January to May in 2010 23Volume in milliontonsIncrease rateTrade sum inbillion dollarsIncrease rateCrude oil 95.7 29.3% 54.28 122.3%Iron ore 260 8.4% 27.8 48.1%Copper 1.9 8.2% 14.2 93.1%Waste metal 5.59 -34% 7.67 99.7%21. Chinese economy helping Latin America out of financial crisis, October 22, 2009, Economic office of Consulate General of China to Sao Paulo,Brazil (only available in mandarin). http://stpaul.mofcom.gov.cn/aarticle/ztdy/200810/20081005844237.html22. China playing the key role in Chilean economic recovery, report from newspaper Strategy of Chile, October 26, 2009, Economic office of Embassyof China to Chile (only available in mandarin). http://cl.mofcom.gov.cn/aarticle/jmxw/200910/20091006584746.html23. Chinese Customs website: http://www.customs.gov.cn/publish/portal0/tab1/info229530.htm.GCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 115-135